Signing up small businesses, market vendors challenge for digital payments

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October 2, 2019

mexico market vendor — Will that be cash or CoDi?

A new digital payment system that allows consumers to make purchases with their mobile phones became operational on Tuesday but getting small business owners and market stallholders to adopt the technology could be a significant challenge and a potential barrier to its success.

For consumers, CoDi – short for Cobro Digital (Digital Charge) – is an app that scans bar codes to pay for purchases and transfer funds between banks.

One aim of the commission-free payment system, developed by the Bank of México, is to provide a convenient, easy-to-use payment method for shoppers.

Another is to encourage businesses that currently only accept cash payments – and may not pay all or any of the taxes they should – to move into the formal economy.

According to consumer insights analyst Carlos Hermosillo, large companies and chains are ready to accept payments via CoDi but small businesses such as mom and pop stores known as tienditas, stallholders at markets and others who operate in the informal sector “will take longer to react,” if at all.

Scan and pay: small businesses might take some time to sign on.

A report in the newspaper El Financiero says that many small business owners fear that if they accept digital payments, their revenue streams will be closely monitored by tax authorities.

It is estimated that only 2% of about a million small, traditional businesses in Mexico such as butcher shops, stationary stores and tienditas currently accept methods of payment other than cash.

Another potential difficulty in getting small business owners to adopt the CoDi system is a lack of familiarity with the technology it uses: a recent poll showed that almost 60% of shopkeepers don’t know what a QR code is.

However, the spokesman for Expo Tendero (Shopkeepers’ Expo), an industry event that will be held in Mexico City in November, said there is interest among small business owners to offer digital payments.

“. . . They’re not closed [to the idea]; 53% said they’re interested in offering this type of service,” Pedro Fernández said.

For his part, the president of the National Association of Small Merchants rejected the claim that business owners’ reluctance to offer non-cash payments is related to their desire to continue to slip under the radar of tax authorities.

“We’re not large [tax] evaders and what can be collected via this channel won’t make a difference to the country’s public accounts . . .” Cuauhtémoc Rivera said.

At least in Mexico’s large and medium-sized cities, where mobile internet service is generally reliable, business owners will likely have to to offer their customers the option of paying via CoDi because they will miss out on sales if they don’t.

Ramiro de Jesús Cavazos, president of Conacca, a national umbrella organization that represents several market vendor associations, said that he expected that customers will demand the “ease of payment” that a service such as CoDi provides.

Their insistence on having access to the service could well come thick and fast.

Citibanamex, one of Mexico’s largest banks, said on Monday that it expects 5 million of its customers to start using CoDi within the next 12 months.

The bank predicted that 500,000 customers will begin using the app in the first two months of the system’s operation alone.

However, Citibanamex CEO Ernesto Torres Cantú said that the pace of the take-up of CoDi will depend on how well it is promoted and whether the federal government moves ahead with a plan to ban the use of cash to purchase gasoline and pay tolls.

A report published by the news agency Bloomberg in August said the government was considering the ban as a means to fight tax evasion and money laundering. The plan is also congruent with President López Obrador’s initiative to increase financial inclusion.

In Mexico City, authorities are stepping in to take the decision whether to offer CoDi payments out of the hands of some business owners.

The Secretariat of Economic Development (Sedeco) has stipulated that by November, all stallholders at so-called mercados sobre ruedas (markets on wheels) or tianguis that pop up in different neighborhoods of the capital on different days of the week must offer customers the option of paying both by bank card and the CoDi app.

“The entire mercado sobre ruedas system will have the digital payment system . . . the two options, cards and QR codes,” said Sedeco official Gabriel Leyva.

The Mexico City government hopes that the move will act as an incentive for stallholders at bricks and mortar markets to introduce digital payments as well.

Beyond street markets, Mexico City residents will also have guaranteed access to digital payments in the capital’s historic center, which will become the country’s first designated Zona CoDi, or CoDi Area.

Torres Cantú, who is also the vice president of the Mexican Banking Association, said that some business owners in the downtown are already offering digital payments while others are in the process of opening their CoDi accounts.

“The historic center Zona CoDi has already started but it will be completed in the next two or three weeks . . .” he said.

When Buen Fin, an annual four-day shopping event similar to Black Friday in the United States, takes place in November, CoDi payments will be available at 100,000 or more points of sale across the country, the Citibanamex chief said.

Source: El Financiero (sp), Milenio (sp), El Economista (sp)

Morena leader proposes state-owned company to control marijuana sales

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MND Staff

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October 1, 2019

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The leader of the ruling Morena party in the lower house of Congress presented a bill on Tuesday that proposes the creation of a state-owned company to control marijuana sales in a regulated market.

The draft General Law for the Control of Cannabis presented by Mario Delgado also proposes the legalization of the cultivation of marijuana for personal use.

Under Delgado’s bill, a state company called Cannsalud (a portmanteau of cannabis and health) would have the exclusive authority to purchase marijuana from legal producers and sell it to both authorized franchisees – who would supply the recreational retail market – and pharmaceutical companies.

“This way the cannabis market wouldn’t be left to the autonomous regulation by individuals but would involve the state as a permanent supervisor and controller of activity involving this substance within a legal framework that would guarantee benefits for all,” the bill says.

The proposal seeks to prevent large companies from dominating a potentially lucrative legal marijuana market.

Deputy Delgado introduces marijuana bill.

A state-owned company would be able to “contain the risks inherent in the establishment of a new market,” the bill states, whereas large companies would “seek to maximize their profits” without regard for the protection of people’s health.

The proposed law also states that adult citizens would be able to grow up to six cannabis plants “without the need for a license or permission as long as they are destined for personal use . . . in the home.”

Morena leads a majority in both houses of Congress, meaning that approval of Delgado’s bill would appear likely but the news agency Bloomberg noted that it is unclear whether President López Obrador would support a state company controlling the legal marijuana trade.

However, the president does generally support greater government presence in the economy.

Congress’s move towards the legalization and regulation of marijuana for recreational purposes follows the publication by the Supreme Court in February of eight precedents on its recreational use, which determined that prohibition of the drug is unconstitutional.

Source: El Financiero (sp), Milenio (sp)

Puebla street vendors scare off restaurant investment

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MND Staff

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October 1, 2019

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puebla street vendors — No restaurants here.

Street vendors in the historic center of Puebla city are scaring off investment in the restaurant industry.

Ten new restaurant projects worth a combined 150 million pesos (US $7.6 million) were slated to start in the heart of Puebla in the final months of 2019 but according to the local president of the national restaurant association Canirac, the investment is now in doubt.

“Investors are worried about the lack of action to remove the street vendors, who have been taking over space since the change of municipal government in the middle of October last year,” said Olga Méndez Juárez.

She claimed that local authorities allow the vendors, known in Mexico as ambulantes, to operate with impunity, adding that the problem is even worse on weekends. Méndez also said that the invasion of street sellers presents a poor image of the city to tourists.

The Canirac president said the heavy presence of the ambulantes is also having a negative impact on existing restaurants in Puebla’s downtown, explaining that patron numbers were down 30% in the first nine months of the year.

Méndez questioned the logic of authorities’ failure to crack down on unregulated commerce in the city’s streets, plazas and parks given that, unlike formal businesses, street vendors don’t pay tax or generate large numbers of jobs.

“If just 10 projects are going to bring 150 million pesos . . . and dozens of jobs, why not . . . do something to remove the informal sector workers?” she asked.

“. . . We’re worried that the city council isn’t looking at this issue with concern,” Méndez said before calling on Morena party Mayor Claudia Rivera Vivanco to do something.

Removing “unfair competition” from the streets of Puebla would send a positive message to both the 150 existing restaurants in the historic center and entrepreneurs planning to open new establishments, she said.

Source: El Economista (sp)

In Oaxaca, 400 territorial disputes have cost 78 lives in 3 years

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MND Staff

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October 1, 2019

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A dispute between Santiago Juxtlahuaca and San Martín Peras in the Mixteca region has been going on for years.

Territorial disputes in Oaxaca have cost the lives of at least 78 people since 2017, according to the state government.

Another 68 people have suffered injuries during heated conflicts over land ownership, while the disappearance of 12 people is believed to be connected to the same issue.

The Secretariat General of the Oaxaca government says there are currently more than 400 unresolved territorial disputes in the state, mainly in the Central Valleys, Mixteca and Sierra Sur regions.

The main reason for the high number is that 81.3% of all land in Oaxaca belongs to ejidos, or agrarian communities, and is therefore owned communally. Complicating the issue further is that half of the 394,000 registered ejidatarios, or community landowners, in the state, are deceased.

Efraín Solano Alinarez, head of the organization Unidad, Identidad y Raices de Oaxaca (Unity, Identity and Roots of Oaxaca, or Unir), told the newspaper El Universal that the figures explain why there is a state of permanent conflict in Oaxaca.

He said the first step in resolving the disputes, particularly in indigenous communities, is to fix the flaws in the collective land ownership system.

Solano said that it is often unclear who owns a parcel of land, explaining that the disorderly growth of towns has in some cases made historical boundaries difficult to identify.

The most serious conflicts occur when private property owners clash with ejidatarios, he added.

To solve the conflicts, the Unir chief said, the records of state and federal authorities need to be consulted to determine the rightful owners of disputed land.

Solano also said that more resources need to be allocated to mediating disputes. To oversee that process, he recommended the establishment of a dedicated government group.

The Unir chief also said that the presence of foreign companies in parts of Oaxaca, especially the Isthmus of Tehuantepec where several wind farms have been developed, has also raised the ire of landowners and led to conflicts.

Solano added that the federal government’s isthmus trade corridor project, which includes the modernization of the railway between Salina Cruz, Oaxaca and Coatzacoalcos, Veracruz, and new mining developments could make existing land conflicts worse or create new ones.

President López Obrador says the trade corridor and other projects such as the Maya Train will bring significant economic and social benefits to the south and southeast.

But Solano warned that “in Oaxaca, the triumph or failure of the president’s social goals will depend on the response he provides to agrarian conflicts.”

Source: El Universal (sp)

Entrepreneurs in Querétaro looking at China for suppliers

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Simon Schatzberg

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October 1, 2019

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The Canton Fair complex, where Querétaro entrepreneurs will be looking for new Chinese partners.

A group of Querétaro businesses is planning a tour of China to look for new partnership opportunities in that country.

Lorena Jiménez Salcedo, Querétaro president of the Mexican Employers’ Federation (Coparmex), said the tour will seek to find new suppliers for Querétaro businesses, as well as other partnerships.

“In China, specifically, we’re mostly looking at suppliers, but we don’t have a specific focus on one area,” she said. “We’re going to look at different contacts that could work as suppliers both for medium and large businesses, or suppliers who can provide specific parts that are necessary for the production chain.”

The delegation will attend the China Import and Export Fair, also known as the Canton Fair, which will take place from October 15 to November 4, and will be attended by around 20,000 businesses.

Jiménez said it is important for Querétaro business to look for alternative partners outside North America. The organization is also looking to build commercial relationships in Brazil.

Coparmex Querétero is also working with Querétaro’s World Trade Center on planning trade missions to other countries. The first will be a visit to Washington between October 1 and 4 to meet with personnel from the World Bank, the Inter-American Development Bank and the Mexican Embassy.

The announcement comes at a time when Chinese businesses are showing more interest in investing in Querétaro because of the trade war between China and the United States, according to Querétaro Sustainable Development Secretary Antonio del Prete Tercero.

Source: El Economista (sp)

Firm plans 7-billion-peso industrial park in Querétaro

By

Cody Copeland

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October 1, 2019

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Artist's rendering of new industrial park in Querétaro. — Artist's rendering of new industrial park in Colón.

The Mexican construction firm Construye Industrial announced that it will build a 7-billion-peso (US $354-million) industrial park in Querétaro, its third in the state.

To be located in the municipality of Colón, just 4.5 kilometers from the Querétaro Intercontinental Airport, the Kaizen industrial park will house both industrial and commercial facilities, as well as services such as a gas station and a 150-room hotel.

The investment includes 3 billion pesos for industrial logistics and manufacturing facilities and build-to-suit lots. Another 2.5 billion will go to data and call center offices, general offices and the hotel. And 2 billion pesos will be dedicated to commercial investments.

The Kaizen project will be LEED-certified, making it a green facility through the use of a sustainable transportation network, 100% renewable energy and the inclusion of green spaces.

The gas station will be the first in Mexico to offer not only gasoline and diesel but natural gas and electrical charges.

Construye Industrial says the project will generate around 1,500 jobs both directly and indirectly through the establishment of 150 businesses. It said it hopes to establish better salaries in the area due to the growth and development of different types of commercial services available to local residents.

Source: El Financiero (sp)

Youths’ made-in-Mexico nanosatellite launches in December

By

Cody Copeland

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October 1, 2019

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The satellite will be launched aboard a SpaceX Falcon-9 rocket.

The first nanosatellite to be completely designed and made in Mexico will be launched from Cape Canaveral in December on a mission operated by Elon Musk’s SpaceX.

Approved by NASA last year, the AztecSat-1 was designed by students at the Popular Autonomous University of Puebla (UPAEP), together with the National Council of Science and Technology (Conacyt) and the private space initiative MX Space.

“It is now ready to be launched into space,” said Andrés Martínez, director of special programs in NASA’s Advanced Systems Division. “It will be a historic day.”

The launch will take place on December 4 on Mission SpaceX-19, the Mexican Space Agency (AEM) reported.

“Our youth are making history,” said AEM director Javier Mendieta Jiménez. “It will be the first satellite to be launched during the administration of President Andrés Manuel López Obrador. It represents an achievement of young Mexican talent in the Fourth Transformation.”

The nanosatellite will be put into orbit by SpaceX’s Falcon-9 rocket, on which the Mexican development team worked.

“Their performance is now comparable to many NASA engineers,” said Mendieta.

Once in orbit, the AztecSat-1 will be allowed to interconnect and transmit data to the Globalstar satellite constellation.

AEM’s head of the AztecSat-1 project, Carlos Duarte Muñoz, praised the young people’s achievement.

“This launch will demonstrate that the talent of our young people can make history and is literally infinite,” Duarte said.

Source: El Financiero (sp)

Taxes no deterrent to junk food consumption: AMLO

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Simon Schatzberg

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October 1, 2019

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junk food — Taxes haven't stopped consumers from choosing less than healthy options.

President López Obrador acknowledged that taxes on unhealthy food and cigarettes have not been successful in discouraging their consumption, but the government plans on raising them anyway.

“It can’t only be about paying more taxes, there needs to be more information for the people,” he told his morning press conference on Monday.

The president also announced that his government will launch an awareness campaign to promote healthy diets.

“We’re going to carry out a media campaign,” he said. “It will be about how to eat well, eat healthy, and not be influenced by advertising that pushes you to eat junk food that not only affects your health, but also your wallet.”

He added that he hopes to promote traditional Mexican beverages as alternatives to soda, like pinole, pozol and chilate.

The government’s 2020 budget includes a new increase on cigarettes and junk food, which is expected to bring in an additional 62 billion pesos (US $3.12 billion).

Source: El Universal (sp)

7 days of Narda leaves a trail of damage on Pacific coast, killing at least 2

By

MND Staff

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October 1, 2019

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Washed-out bridges and mudslides cut off many communities in Guerrero.

Tropical storm Narda left a trail of damage along Mexico’s Pacific coast as it moved northward during the past seven days, hitting the states of Oaxaca and Guerrero particularly hard.

The storm claimed the lives of two people in Oaxaca: a 23-year-old man and a 17-year-old boy who were swept away by floodwaters while trying to cross rivers in the municipalities of San Pedro Mixtepec and San Jerónimo Coatlán respectively.

About 300 homes and at least 11 schools were damaged in the southern state as was the hospital in Tutupec, a municipality halfway between Puerto Escondido and Pinotepa Nacional.

At least nine rivers broke their banks, scores of trees fell, access to 47 Oaxaca municipalities was cut off and more than 800 people took refuge in shelters.

Federal transportation official Jaime López Carillo said that sections of three federal highways in Oaxaca collapsed due to heavy rain brought by Narda.

A National Guardsmen provides aid to flood victims.

Federal Highway 200 was closed on Monday from the Guerrero border to Puerto Escondido due to landslides and flooding, while sections of the Oaxaca-Miahuatlán-Puerto Ángel highway and the road between Pinotepa Nacional and Putla de Guerrero were also impassable.

Oaxaca transportation official David Mayrén Carrasco said that 23 rural roads in the state had also closed.

In Guerrero, Narda caused the collapse of sections of several roads and highways, triggered landslides, damaged schools, felled hundreds of trees, cut power in parts of the state and flooded about 800 homes.

Acapulco Mayor Adela Román Ocampo said the city’s three water supply systems sustained rain damage and that residents could be without running water for two to three weeks.

The newspaper Milenio reported that at least eight towns in the municipalities of Juan R. Escudero and Tecoanapa remained cut off on Monday after the Omitlán river broke its banks and caused a 100-meter-long section of road leading to a bridge to collapse.

In Tixtla, a municipality just east of the state capital Chilpancingo, the entire drainage system collapsed after Narda dumped torrential rain. One person was reported missing in the area.

Damaged bridge leaves Guerrero residents stranded.

Guerrero Governor Héctor Astudillo asked federal authorities on Monday to declare a state of emergency in 28 municipalities in order to access funds to purchase food, water and other essential supplies.

Narda also caused damage in Michoacán, Jalisco, Colima and Nayarit.

The Colima-Manzanillo and Manzanillo-Barra de Navidad highways closed on Monday due to landslides, while at least 120 homes were damaged in Jalisco. Three people were rescued from a flooded creek in Nayarit while activities in the port of Mazatlán, Sinaloa, were temporarily suspended.

National Civil Protection authorities said that rain brought by Narda forced the closure on Monday of schools in 138 municipalities in six states: Guerrero, Oaxaca, Michoacán, Jalisco, Colima and Sinaloa.

The United States National Hurricane Center (NHC) said the remnants of Narda were located 210 kilometers northwest of Los Mochis, Sinaloa, at 10:00am on Tuesday.

Maximum sustained winds had decreased to about 45 kilometers per hour and no coastal watches or warnings were in effect but rainfall is still likely across portions of northwestern Mexico, the NHC said.

Source: Expansión Política (sp), El Universal (sp), El Imparcial (sp), Informador (sp), Milenio (sp)

AMLO favors university admission without entrance exams

By

Simon Schatzberg

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October 1, 2019

0

Students line up for a university entrance exam in Guadalajara.

President López Obrador said Tuesday he would support ending admission exams for public universities.

“I don’t support admissions tests,” he told reporters at his morning press conference. “I think everyone should have the chance to study. If they are behind there should be a catch-up period so that they can study, but we shouldn’t reject people.”

He noted that 60% of students at the National Autonomous University (UNAM) are from poor families because UNAM automatically admits students who come from UNAM high schools, while only 35% of students at other public universities come from poor families.

“In the neoliberal period, they used the excuse that young people hadn’t passed the test to reject them,” he said. “But it was a lie. It’s not that they didn’t pass the test, it’s that there were no spaces, because there was no budget for the universities; it was a pretext to privatize education.”

The president added that a central part of his political project is improving access to higher education, and that his government is working on opening 100 public universities around the country.

“Everyone needs to have the opportunity to study,” he said. “I don’t believe in the policy of rejection, it’s a thousand times better for a young person to study than to have them on the street.”

Source: El Financiero (sp), Forbes México (sp)

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